Non-Disclosure Agreements (NDA) for Business Owners

Ready to protect your business idea with the right NDA contract and step-by-step guidance?

If so, here we go…

What it Means to Have and Use an NDA:

A non-disclosure agreement (aka NDA) is an agreement that information shared or disclosed between parties will not be shared, disclosed or misused to anyone else without permission.

It prohibits other businesses and people you do business with from overstepping or misusing your information. And if they do, the NDA gives you enforceable empowerment to step up, say and do something about the mishandling of your information, and get reimbursed for any harm that happened to your business from the error.

NDAs are both a benefit and a protection.

Using an NDA is not about injecting business legal red tape into your business. Nope! It’s about building a future, revenue opportunities, and choices into your business outlook.

Over the lifetime of your business, you grow, you adapt and you increase your revenue. Along the way, your business ideas grow, your customer list grows and so do your suppliers and business partnerships.

To do this, you have to share and disclose your business information.

What good is a key vendor if they cant understand how your business functions, and no customer is going to purchase your product if they can’t learn how it may fit into their business?

Information exchange is imperative to collaborations, growth and business success.

But the more you share and disclose, the more likely things get leaked, misplaced, or worse- hacked.

This is why NDAs are the key to unlocking the best business opportunities, fortifying trust and collaborations all while empowering you to decide how and where your information can be used.

NDAs are saying “I trust you and you can trust me, do you agree?"

Here’s the thing: No one does business with people they don’t trust, but no one will care about your life’s work more than you do. Others will prioritize their life’s work over yours.

It’s not bad; it’s human nature.

We’re each here to give our best into the world.

And sometimes your business information may get caught up in the wrong place, wrong time or mis-prioritized from how you would have chosen it.

You want to do business with companies and people you not only trust, but who are willing to uphold that trust.

NDAs are the document that does that.

Let’s take a look at some of the revenue-building benefits of using NDA for your company:

Today you are establishing a foundation of trust with your customers, suppliers and business partners. You send an NDA that says, I do business the right way with trust- are you in?

Tomorrow your NDAs will enable the confidence to build amazing collaborations, connect with trusted partners and generate revenue, product ideas, and ideation from the foundation of trust already established.

You may even collaborate with a known competitor, merge with another company, or find investors based on your foundation of trust.

In the future, if mistakes happen, or owners, managers or industries change, and things aren’t as ideal as they once were- you know you are safe from the negative impacts. Most importantly, should something go wrong- accidentally or intentionally- you have choices.

You can choose to step up and stop it, or get the other party to step in. You also have the choice to get reimbursed, ask the courts for help, receive damages and have the NDA agreement back you.

Without an NDA, you don’t have these choices to take action, you can’t ask for help, and you won’t get reimbursed.

Using NDAs in your business is about building a future of growth you can maximize and giving your business the proactive protection it needs to stay solid through a storm all while building foundations of trust today.

 Check out 9 Ways NDAs can increase business revenue here. 

Some great revenue opportunities that have come up because of NDAs

• A tech company developed groundbreaking software but lacked the resources for mass production. By using an NDA, they securely shared the technology with a larger company, leading to a lucrative licensing agreement and royalties.
• Two companies collaborated on a new product launch. An NDA safeguarded each company's confidential marketing plans and customer data, preventing competitors from gaining an advantage and ensuring a smooth, successful product launch with maximum revenue potential.
• A consulting firm, under NDA, gained access to a client's sensitive financial information. This allowed the firm to provide highly targeted recommendations, leading to significant cost savings and increased profitability for the client, strengthening the relationship and ensuring repeat business.

Some harmful things that happened when there wasn’t an NDA in place.

Mark Zuckerberg was accused of stealing the idea for Facebook from fellow Harvard students Cameron and Tyler Winklevoss, who lacked a formal NDA. This led to a lengthy legal battle and a settlement that cost multiple six figures.

A former employee of a beverage company revealed the secret recipe for a popular drink to a competitor, causing significant financial losses and damage to the company's reputation. An NDA could have deterred this disclosure and held the employee accountable.

Two businesses entered into a collaboration without an NDA. One company shared confidential marketing strategies and customer data, only to have the other company use this information to launch a competing product, effectively undermining the partnership.

See, NDAs are not just about protection, they are about winning, revenue, and growth- the right way.

Ok, so you are into the idea of using an NDA, but where do you start and what’s it going to take to get it up and running?

The great news? NDAs are super easy to use (the easiest business document there is) and because they are only about 1 thing- protecting information- you don’t have to be a contract expert to get your basics down super fast.

Nope. You just have to know 1 thing: your business. Because its your business information and compliance that’s at issue. That’s it!

And no one knows your business better than you!

So where do you start?

First, you’re going to get a great NDA template. Start with one designed for your businesses in business relationships. DO NOT use a generic “free NDA” it won’t do what you need it to.

Look for one that is a “mutual NDA for business.” Mutual means both parties will be protecting information equally, so everyone is fair and equitable in these NDAs. Also, that it is for business.

Learn the types of NDAs here.  

NDAs can be used in all sorts of scenarios, from celebrity dating to settling a court case and you don’t want any of that nonsense in your business deals. So get an NDA “for business”.

Then simply customize it for your business in these key areas:

1. The definition of confidential information. You want to be sure the types of information you want protected are listed in this section because if it’s not listed then the NDA doesn’t protect it.
2. The obligations section of your NDA. This is where you set the standards for how you want your information treated and for what uses it can and cannot be used for without your permission.
3. Location of law. There are 50 states which means 50 ways of interpreting and applying contracts. Can kinda make your head spin. Again, don’t worry, no one (not even the lawyers) are experts at this one, so just pick the state you're most comfortable with or that you trust the most for your business.
4. How long do you want the information protected? You’re going to list this in the Term section of the NDA. Technically NDAs can last in perpetuity, but in practice, perpetual NDAs are a headache (and will cost you money down the road) so avoid that hair-raising mess and pick a timeframe of 1-3 years for most companies. Some companies like to go up to 5 years.
5. Make sure everyone’s names, addresses and signatures are all set at the top and bottom and…

Voila! You have an NDA that is ready to use in your business! And unless things change much in any of the categories above, you can reuse the same NDA over and over again.

 You now have repeat ongoing NDA protection, without the ongoing legal fees. How awesome is that?

What do Do with Your Shiny New NDA?

Great you have it- now what do you actually do with it?

Ask the other side to sign it.

Yes, it can feel intimidating to do something for the first time. You’re afraid you’re going to mess it up, scare the other side away, or worse- insult them. But don’t worry, NDAs are used in every single established business.

It’s possible they are expecting you to ask them to sign one. They’re just waiting for you to ask.

I once worked for a company that wouldn’t let their sales team have a conversation without an NDA in place. Yes. They required potential new customers sign an NDA before they even knew what the product was!

If those sales reps can get NDAs signed every day, you can too.

How do you ask the other party to sign?

How would you ask them to do anything else?

“Hey, wanna grab lunch on Tuesday?” Or “A new product feature just came out you’ve got to see, let’s set a date.”

Do the same with your NDAs:

“Hey, let’s get an NDA in place before the call on Tuesday” or “We have a new feature of the product that’s rolling out, let’s get an NDA in place so I can share it with you.”

Ask in a way that is 100% true to being you while treating it like it’s an everyday business ask- because here’s the thing- it IS an everyday business ask.

And once you get over the first-time nerves of asking, you’ll start to treat NDAs like an everyday thing too.

Don’t sweat the small stuff on this.

They sign. You sign, and you, my friend, now have an active legally binding NDA giving you all the benefits we talked about above.

Look at you go!

But wait there’s more!

(Isn’t there always more?)

NDA signature is the beginning of your fun and awesome NDA for business ride, but it is just the beginning.

For example, every NDA must end. Whether naturally because everything went awesome and according to plan, or by termination because someone just wasn’t feeling it anymore.

Either way, all good things come to an end based on the term you listed in #4 above. So be mindful of when this occurs, because you're going to want to take some action steps to protect any information the other side may still have.

Because without an active NDA in place, your information is no longer protected and you lose all the choice benefits and options that you were after when you started this whole thing!

Then there’s stuff that might happen during the term of your NDA. These things come and go as businesses shift and change over time:

First is, what if you need to change or update your NDA post signature? We call these amendments.

The other is the poop-scoop of business deals and that is what if someone breaches the promises they made? Ouch!

Don’t worry, I’ve got plenty of resources on my YouTube channel that help you navigate these things. I just didn’t want to leave you unaware and caught off guard.

And of course, If you’re looking to get set up with an NDA template, customization and more details on any of the items above, you can check out my NDA Today program where you’re guaranteed to have a customized ready-to-use mutual business NDA, talk tracks, and more all in 90 minutes.

Not to mention, you get to hear my lovely voice instead of the one in your head you’ve been chatting with all day. You’ve got choices, my friend.

Either way, I hope you are feeling confident, masterful and like the awesome business leader you are ready to take on the world with your new NDA know-how.

With Awesomeness and Love,

CEOLegalCoach.